tions Problem 10.41 (PPP and Exposure) Algo ebook Layton Co. (a U.S. firm) attempts to determine its economic exposure to movements in the Japanese yen by applying regression analysis to data over the last 36 quarters SP - Do + b1e+ where SP represents the percentage change in Layton's stock price per quarter, e represents the percentage change in the yen value per quarter, and is an error term. Based on the analysis, the be coefficient is zero and the b: coefficient is 0.4 and is statistically significant. Layton believes that the inflation differential has a major effect on the value of the yen (based on purchasing power parity). The inflation in Japan is expected to fall substantially while the U.S. inflation will remain at a high level. Would you expect that Layton's value to be favorably affected, unfavorably affected, or not affected by its economic exposure over the next quarter? Explain Based on purchasing power parity, the relatively low Inflation in Japan will place -Select pressure on the yen. Since the coefficient Select the percentage change in Layton's stock price -Select- related to e and, therefore, the value of the stock will -Select 3. Thus, Layton's value -Select affected